A thorough study of the interaction of states in the formation of international economic and trade rules would assist China participating more actively in the process of international economic and trade rule-making.There is few theory or model in current literature that can be applied directly to the process of international economic and trade rules formation.After reviewing relevant literature and negotiation materials,we find the interaction mechanism of states can be divided into three phases:the phase of rule-proposing,rule-negotiating and rule-cascading.During the phase of rule-proposing,the states create or adopt rule conceptions and call for negotiations based on national interests and cost-return calculations.During the phase of rule-negotiating,the rule-designing state and other stake-holding states exchange opinions and interests,and thus reach consensus on the draft of rules through trade-offs and compromises.During the phase of rule-cascading,the states that have not participated in the first two phases would have great difficulties to change the draft.They can only weigh their interests,and decide whether or not to accept the rules.During these three phases,the states can adopt strategies including seeking consensus at the spiritual level or exerting pressure at the material level.